Martin Lewis shares 'no-brainer' deal for people staying on energy price cap
Martin Lewis appeared on The Martin Lewis Money Show Live
PA
Martin Lewis has highlighted an energy tariff which is cheaper than the price cap.
Speaking on The Martin Lewis Money Show Live tonight, the money saving expert explained the E.On Next Pledge tariff tracks £50 a year, on average, below Ofgem's energy price cap and changes quarterly.
E.On Next is now offering its E.On Next Pledge tariff to new customers, having previously only been available for existing customers.
It means that while the amount people pay on the Next Pledge tariff will also increase when the price cap goes up in January, it will still be cheaper than the price cap.
Martin Lewis spoke about a variable rate energy tariff which is cheaper than the price cap, but people are locked in for a year
PA
Mr Lewis told ITV viewers: "This is the big news that has changed this week. It isn't the greatest saving in the world but I'm allowed at last, I'm able to say there is an easy deal many people can get to save money on energy bills. It's three per cent cheaper [than the price cap].
"It's the E.On Next Pledge tariff, which you will have heard me talking about before but in the past, until a couple of days ago, it was only for existing E.On customers.
"Now, anybody can switch to it - they will allow new customers and customers from other firms to move across."
More than 20 million homes are on the Ofgem energy price cap, which is a limit on how much an energy supplier can charge for each unit of energy in England, Scotland and Wales.
From January 1, 2024, the price cap will rise, meaning a typical household that uses gas and electricity and pays by Direct Debit will face a unit rate of 29p/kWh for electricity and 7p/kWh for gas.
The average daily standing charge will be 53 p/day for electricity and 30 p/day for gas.
Mr Lewis said of E.On Next Pledge: "This tracks the price cap, so if it goes up in price, this goes up. It goes down if the price cap goes down.
"For somebody on typical usage, it's worth roughly £50 a year [in savings]."
Mr Lewis explained: "The bigger user you are, the more you get the benefit because it's a discount on the unit rate.
LATEST DEVELOPMENTS:
"Who can get it? Well, you have to be paying by direct debit. It's dual fuel or electricity only, so that doesn't matter. You do need a smart meter or you need to agree to get one if you're signing up to this or you can't use this, and you'll have to apply online."
The financial journalist pointed out this tariff does have early exit penalties - meaning if a person leaves within the year, they'll have to pay £25.
He added: "If you're the type of person staying on the price cap and you're happy to go to E.On Next, this is quite simply a three per cent saving over the next year. No-brainer - price cap is there, this is there, they'll move together."
Elsewhere in the show, a viewer asked if it was worth going on a fixed tariff, pointing out the price cap will rise from January but could potentially then fall.
Within his answer, Mr Lewis replied: "Is it worth locking in on a cheap fix? You need a crystal ball because what you have to answer is how do today's fixed prices compare to tomorrow's price cap?"
The Martin Lewis Money Show Live continues in January.